ST. LOUIS, Aug. 10, 2007 (PRIME NEWSWIRE) -- Furniture Brands International (NYSE:FBN) announced today that it has closed on its previously announced long-term debt facility.
On August 9, 2007, the Company entered into a Credit Agreement with certain financial institutions and JPMorgan Chase Bank, N.A., as Administrative Agent. The new Credit Agreement is a revolving credit facility with a commitment of $550 million, subject to a borrowing base of certain eligible accounts receivable and inventory. The facility allows for the issuance of letters of credit of up to $100 million and cash borrowings. Interest under the facility for the first six months will equal either: (i) the greater of the prime rate and the Federal Funds Effective Rate plus 1/2% for base rate loans, or (ii) 1.25% plus LIBOR for the applicable interest period for Eurodollar loans. After six months interest will fluctuate with average availability. The new facility is asset-based, and is secured by all of the Company's and its domestic subsidiaries' accounts receivable, inventory, cash deposit and securities accounts and certain intangibles.
The Company borrowed funds under the new Credit Agreement to pay in full the existing indebtedness in the amount of $150 million owed by the Company pursuant to the terms of its Credit Agreement dated April 21, 2006. The old Credit Agreement terminated upon the payment of those amounts. The Company also repaid in full the $150 million in Senior Notes issued under a Note Purchase Agreement dated May 17, 2006. Along with that repayment, the Company paid a make-whole premium of approximately $17 million and accrued interest of approximately $2.5 million, terminating the Note Purchase Agreement. Partially offsetting these amounts, the Company received payment of $2.8 million on an interest rate hedge.
More detail about the new credit facility, together with a copy of the Credit Agreement, will be included in a Form 8-K filing to be made by the Company soon.
W. G. (Mickey) Holliman, Chairman and Chief Executive Officer, commented: "We made the decision several months ago to change our long-term debt structure to more closely match our long-term strategy and financial goals. Our new facility was well over-subscribed by our participating financial institutions, and we are pleased to have brought it to conclusion. We expect this new facility to give us the capital structure and the flexibility we need to respond to market conditions and to accommodate our growth initiatives."
About Furniture Brands
Furniture Brands International is one of America's largest residential furniture companies. The company produces, sources, and markets its products under six of the best-known brand names in the industry -- Broyhill, Lane, Thomasville, Henredon, Drexel Heritage, and Maitland-Smith.
The Furniture Brands International logo is available at http://www.primezone.com/newsroom/prs/?pkgid=2757
Matters discussed in this release and in our public disclosures, whether written or oral, relating to future events or our future performance, including any discussion, express or implied, of our anticipated growth, operating results, future earnings per share, plans and objectives, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are often identified by the words "believe," "positioned," "estimate," "project," "target," "continue," "intend," "expect," "future," "anticipates," and similar expressions that are not statements of historical fact. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Our actual results and timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2006, our quarterly reports on Form 10-Q, elsewhere in this release, and in our other public filings with the Securities and Exchange Commission. Such factors include, but are not limited to: changes in economic conditions; loss of market share due to competition; failure to forecast demand or anticipate or respond to changes in consumer tastes and fashion trends; failure to achieve projected mix of product sales; business failures of large customers; distribution and cost savings programs; manufacturing realignments; increased reliance on offshore (import) sourcing of various products; fluctuations in the cost, availability and quality of raw materials; product liability uncertainty; environmental regulations; future acquisitions; impairment of goodwill and other intangible assets; anti-takeover provisions which could result in a decreased valuation of our common stock; loss of funding sources; and our ability to open and operate new retail stores successfully. It is routine for internal projections and expectations to change as the year or each quarter in the year progresses, and therefore it should be clearly understood that all forward-looking statements and the internal projections and beliefs upon which we base our expectations included in this report or other periodic reports are made only as of the date made and may change. While we may elect to update forward-looking statements at some point in the future, we do not undertake any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.